RIM Takes It on the Chin Again

By Rob Spiegel
Oct 11, 2011 11:41 AM PT

Research In Motion just can't catch a break. The outages in Internet service RIM suffered on Monday in the EMEA region have spread to India and South America. BlackBerry users across all of those areas are experiencing loss of Internet and messaging services.

RIM acknowledged the outages and noted in a brief statement that "some users in Europe, the Middle East and Africa, India, Brazil, Chile and Argentina are experiencing messaging and browsing delays."

Carriers throughout the affected areas have issued apologies for the service interruptions. There have been no reports of service problems in North America.

While it isn't clear what went wrong with RIM's Internet and messaging services, reports pointed to server problems in either Canada, RIM's home, or in the UK. RIM has not indicated when the problem will be solved.

Perfect Timing for a Jaguar Attack

As RIM works to resolve its outage problems, the company is getting hit by a new round of calls for a shake-up in its corporate leadership.
Jaguar Financial, a RIM investor, wants the company to hire a new CEO to replace co-CEOs Jim Balsillie and Mike Lazaridis. The firm is also demanding that RIM put itself up for sale either as a whole or in parts.

Holders of at least 8 percent of RIM's stock are behind the call for a sale or corporate shake-up, according to Jaguar CEO Vic Alboini. Jaguar has been hammering RIM for changes for months.

Jaguar did not respond to the E-Commerce Times' request for comments by press time.

The outages in service come at a time when RIM has been struggling on a number of fronts. The smartphone explosion has left the BlackBerry in the dust, and RIM has not been able to regain traction in the market. The company's stock value reflects these troubles. The current stock price is below US$24 per share, down from nearly $60 just last spring.

Still Some Oomph Left

While interruptions in service would be a challenge to a company even during the best of times, RIM's problems with service come while it's being hit hard by competitive forces. Even so, RIM has a deep hold on its corporate customers, and it has plans to go up against its smartphone competitors with new products.

"The current outages are clearly an embarrassment on top of some existing negative sentiment in the market," Martin Bradley, associate director at Strategy Analytics, told the E-Commerce Times. "Yet there are also plenty of reasons to be more positive about the company's underlying capabilities across a range of competencies. RIM has a strategy that still makes a lot of sense."

If RIM manages to avoid further unfortunate events and work quickly, Martin suggested, it "should be able to drive through to the better future it deserves."

Corporate Users Want Reliability

RIM's outages have occurred at a time when the company is struggling against a huge wave of smartphone products coming from a number of vendors.

"This couldn't have come at a worse time for RIM," Laura DiDio, principal analyst at ITIC, told the E-Commerce Times. "They're fighting an uphill battle against the iPhone, Android and Windows Phone 7."

The outages will be more than a little annoying to RIM's customers.

"Most of us go crazy after about 15 minutes of outage, and RIM says it still doesn't know what's wrong," said DiDio. "This outage has gone one for such an extended length of time. If it's a problem with the equipment, that's troubling.

Customers today insist on reliability, DiDio noted. "This is particularly true if you have a product like the BlackBerry that is entrenched in the corporate setting. If your kid's cellphone is out for a while, you might rejoice. In corporate America, that doesn't fly -- particularly when you think that the reason they were installing the BlackBerry in the first place was to get their email while they were out of the office."